Is Your Medical Aid Secure this Festive Season?

By Wikus Joubert, 10 December 2015

‘Tis the season to review your medical aid cover. Not exactly a catchy tune, but a reality that comes around this time of year, every year. Medical aids offer clients the opportunity to upgrade their existing package effective January the following year. We see increased advertisements, articles, blogs and talks on the subject from around October through to December.

Medical aid cover is crucial to your financial plan. It is widely accepted that medical aid, car and household insurance and a last will & testament are the “no-brainers” that every person should have in place. It is important to ensure that you are covered at a level that meets your needs and your pocket.

So, what are the basic things we know about medical aid?

It is important, because it pays for medical expenses that would otherwise be financially crippling had you not been covered;

It doesn’t come cheap. Packages for a family of 4 can range between R3,000 pm and R15,000 pm;

It becomes more expensive every year. Medical inflation between 2000 and 2013 averaged 7.9% per year, whereas CPI averaged 5.8% over the same period (Alexander Forbes Health Diagnosis, 2014/2015)

If you don’t pay your premium every month, your cover falls away.

It is specifically the last bullet point above that enjoys the least amount of attention in the advertisements, articles, blogs and talks that take place.

If your medical aid is so crucial to your financial plan, is expensive to maintain; and runs the risk of falling away after missing a single monthly payment, shouldn’t we look at ways to protect our medical aid cover?

Your medical aid premium is paid from your bank account. Your bank account is topped up every month by your income. This means that your income pays for your medical aid. Not exactly rocket science, but a simple concept that not many people realise.

Your ability to earn an income can be disrupted by disability (temporary or long-term), retrenchment, or death. Your SFP financial planner can aid you in putting a solution in place that protects you against all of these risks, thereby ensuring that there is money available to fund your medical aid in the event you cannot generate an income.

This protection kicks in if any one of the following unfortunate events happens to you:

Temporary disability – if you can’t work due to injury or illness (even if only for a week), then you get paid for up to two years. 7 out of 10 people will suffer at least one temporary disability event in their life (FMI Claims Record, 2014);

Long-term disability – if you can’t work for a prolonged period, you are covered up to retirement age (or for whole of life);

Retrenchment – salaried persons who are retrenched can get paid for up to six months while they find a new job;

Death – if you pass away, your spouse can get paid until their death, and your spouse can receive payments for your children until they leave your medical aid. This ensures that your loved ones are looked after when you are not there to look out for them

And all of this doesn’t cost an arm and a leg. For example, a 40 year old male, married, with two children, who is paying R5,000 pm for his medical aid, can put the full solution in place for less than R360 pm.

SFP can offer you this holistic protection for your medical aid by dealing with an income protection specialist called FMI. FMI has been specialising in this niche market for over 20 years and has a great claims payment record.

On top of this, SFP and FMI can provide you with the best future insurability solutions in the market, meaning that you can increase your cover every year without having to undergo medical testing – a great way to keep your cover in line with your medical aid premiums.

The Roman poet, Juvenal, asked: Quis custodiet ipsos custodies? (Who guards the guardians?). Let’s not fail to protect the protection we have in place. Especially now that it is so easy to secure such protection. Ensure that your medical aid is protected against life’s risks – speak to your SFP financial planner today.